ATHENS — After months in which Greece teetered on the verge of bankruptcy, European officials agreed Tuesday to give the country a second massive bailout in exchange for harsh austerity measures, as grim new estimates about the country’s economy pushed off a resolution until what some officials called the last possible day to reach one.

The decision buys time for the Mediterranean country to try to fix its staggering problems, and gives assurances to the world that a Greek default — and its possibly disastrous ripple effects — will be forestalled, at least for now. If Greece had been cut loose, it would have defaulted in late March, and doubts about the viability of larger countries such as Spain and Italy might have grown.

After more than 12 hours of talks, the countries that use the euro reached an agreement early Tuesday to hand Greece $170 billion in additional bailout loans to save it from a potentially disastrous default next month.

Under the terms of the deal, private bondholders will take a larger loss than had previously been planned in an attempt to get Greece’s debt to what European officials consider a sustainable level by 2020. The officials also agreed to reduce the interest they charge Greece for the long-term loans.

“We have reached a far-reaching agreement on Greece’s new program and private-sector involvement that will lead to a very significant debt reduction for Greece,” Luxembourg Prime Minister Jean-Claude Juncker, who heads the bloc of 17 countries that use the euro, told reporters in Brussels after a 14-hour negotiation. He called the amount of aid “unprecedented.”

Washington Post

Here is odious debt: debt taken on by a tyrannical regime in the name of the state to serve the interest of the tyrant rather than the state or public. As such it is personal debt of the tyrant and his cronies, not any obligation of the public. The Greeks did not have a vote regarding the hundreds of billions of euro debt just now lodged against them. Such a vote is forbidden by the powers outside of Greece who run the country. This dead-money debt was imposed by a cabal of bankers using the outer forms of the European state and the IMF to ‘manage’ the sock puppet Greek government.

About 100 years ago a German economic entity started to be formed out of many regional economies. As unification of the country was still way out of the question, economic treaties started to develop, finally reaching its peak in 1843 with the German ‘Zollverein’ (Customs Union) and bringing with it huge economic advances.

What did the situation look like before? Anyone passing through Germany traveled on poor roads and had to pay countless duties and tolls on his way through dozens of states. Each of these states had its own sovereignty, financial system and currency attempting to form something like its own independent economy.

Those in charge then simply could not understand that their great neighbors, England and France, had advanced because they had created an economic area for themselves, which corresponded to the level of technology and transport reached at the time. Friedrich List, the great proponent of Germany’s economic union, criticized the situation at that time saying, “The chances for German industry to rise up would immense if each factory owner could choose from an pool of 30 million people! Mining, agriculture and cattle rearing could really take off if each branch of production could take its natural course!”

One of the decisive forces, which the small nation ideal finally had to bow to, was the revolutionizing effect on the economy and transport of technical progress, especially the steam engine. If we say Europe now, instead of Germany, then we come naturally to a similar, if not identical, conclusion – from a purely economic perspective. Once again it is the economic and technical progress, which pushes inexorably to the formation of large continental economic areas. Today technology offers possibilities, which cannot be fully utilized by individual national economies. Nations’ borders have been brought closer together by the increased speed of trains, the extension of the road network and waterways, the transcontinental energy supply, which offers so much potential and, above all, the airplane. Outside Europe, huge economic areas are already, or are in the process of being formed, from a combination of these factors. For its own good, Europe has to be dragged out of its romanticized backwardness. The difficulties, of course, of a European economic union are larger than those that had to be overcome by the German Customs Union. The means will be difficult and more complicated, and it certainly will not be achieved just through a customs union. Nonetheless, there will be a European economy entity because its time has come.

Angela Merkel became German Chancellor
in 2005 and has close connections to
the chemical lobby.

• Merkel studied physics at the university
of Leipzig in Eastern Germany
from 1973 to 1978. Later, she was awarded a doctorate for a
thesis on quantum chemistry. Between 1978 and 1990, Merkel
worked and studied at the Central Institute for Physical Chemistry
at the Academy of Sciences in Eastern Berlin.

• After the reunification of Germany, Merkel was elected as Member
of Parliament of the German Bundestag in 1990.

• In 1991, Merkel became Minister for Women and Youth in
Helmut Kohl’s cabinet. From 1994 to 1998, Merkel served as
Minister for Environment and Nuclear Safety. She had a close
relationship with Kohl and became known as “Kohl’s Mädchen”
(Kohl’s girl). In 2000, Merkel succeeded Kohl as the party chair
of the CDU party.

• In 2005, Merkel became Chancellor in Germany. In a speech,
shortly before being elected, she said: “The people of Germany
have no right to democracy and a free market economy in the
future!” It was obvious that Merkel had been briefed by representatives
of the cartel.

• One of her close advisors is the chief executive of BASF, Jürgen
Hambrecht. During WWII, BASF was one of the members of the
IG Farben cartel.

We’re talking about ALEC, the American Legislative Exchange Council, a secretive organization from the Koch Brothers made up of politicians, corporations and think tanks, and this is the first in a multi-part series about the group, its goals and the people behind it.

ALEC is not a lobby; it is not a front group. It is much more powerful than that. Through ALEC, behind closed doors, corporations hand state legislators the changes to the law they desire that directly benefit their bottom line. Along with legislators, corporations have membership in ALEC. Corporations sit on all nine ALEC task forces and vote with legislators to approve “model” bills. They have their own corporate governing board which meets jointly with the legislative board. (ALEC says that corporations do not vote on the board.) They fund almost all of ALEC’s operations. Participating legislators, overwhelmingly conservative Republicans, then bring those proposals home and introduce them in statehouses across the land as their own brilliant ideas and important public policy innovations—without disclosing that corporations crafted and voted on the bills. ALEC boasts that it has over 1,000 of these bills introduced by legislative members every year, with one in every five of them enacted into law. ALEC describes itself as a “unique,” “unparalleled” and “unmatched” organization. It might be right. It is as if a state legislature had been reconstituted, yet corporations had pushed the people out the door.

An “unparalleled” and “unmatched” organization, funded by corporations who craft “model” legislation that is then filtered through to state legislatures through their political members. Not something that inspires any sense of security. But this is the real fight, people. In many ways, this is not red vs. blue, this is not Democrat vs. Republican, or Progressive vs. Conservative; this is democracy vs. a corporate coup of the United States of America.

Who is behind ALEC?

It should come as no surprise that the Brothers Koch, Charles and David, are major players in ALEC.

It is always the power elite Nazis who conspire to deprive the rights of the ordinary citizens rather than the other-way around:

The membership of ALEC should scare the pants off of anyone who values a true democratic government and society. It is made up of a combination of politicians and corporations from almost every state. Their “Public” Board of Directors consists entirely of Republican lawmakers:

In addition to the politicians and corporations, several think tanks serve as members including the National Rifle Association, the Friedman Foundation for Educational Choice (started by the “shock doctrine” mastermind Milton Friedman), Dick Armey’s Institute for Policy Innovation, and the Mackinac Center for Public policy, which spent a lot of time meddling in the Wisconsin protests.

Also on board are several “scholars,” the majority of whom have direct ties to the Koch brothers. The most recognizable is Stephen Moore, the founder of the Club for Growth and a former senior fellow at the Cato Institute, founded by Charles Koch in 1977.

Debtonomics:

– There are two forms or sectors within debtonomy, the so-called productive sectors; mainly the automobile, aircraft, energy supply/transmission, basic metals and materials, chemical and warfare industries, industrial agriculture; the ‘health’care rackets; pharmaceutical, house-building and highway construction; the mining industries and ‘retail’. These are the instruments of waste and tyranny. Supporting the industrial sector is the finance sector which provides credit without which the industrial sector cannot exist.

– Debtonomics argues that industrial enterprises are empirically not productive. These industries have no special rights or claims to debt subsidies but have simply overthrown the credit establishment. The productivity claims are lies repeated enough — by way of advertising — to become the truth.

– Debtonomics argues the way to end the abuses of industrial enterprises is to end their subsidies, to make industries pay their own way. The instrument of self-financing debt then can be used for other activities, such as to undo the damages done over the decades by the industrial enterprises. These ‘undoing’ activities would in turn tend to be productive over the longer term as they would represent capital husbandry rather than its erosion or destruction.

Greece does not produce any petroleum energy to speak of: a few thousand barrels per day from offshore fields. It has to import fuel from overseas, mostly from Middle East producers such as Iran. Where does Greece get the hard currency to swap for petroleum overseas?

From an energy standpoint Greece is insolvent. It once borrowed — euros — from banks to buy fuel. Now it has to borrow from new banks to pay off the old banks AND to buy the fuel. Greece is on the road to oblivion. It buys less fuel even as it falls further into debt. Without some drastic change Greece will not only default but collapse.

Like the other countries, Greece obviously failed to earn enough from using the fuel to pay its energy bill otherwise it would not be insolvent.

Credit is needed to save the Euro-states from bankruptcy, adding credit pushes up the price of crude petroleum in the ‘asset’ markets. A severe recession is underway in the Eurozone regardless of what takes place in Greece and elsewhere:

Figure 1: The barrel of crude in the Eurozone, priced in euros as expensive as it was in 2008. The outcome of the high price is demand destruction.

“We need to remove the fact that we’ve got the mass car market in Europe, which is economically unproductive and which, just in raw, pure economic analysis, does not deserve capital allocation of any kind,” Fiat chief Sergio Marchionne said on a conference call with analysts Feb. 1.

“If volumes stay where they are, I think if you took out 10 to 15 percent of the capacity, maybe 20 percent of the capacity in Europe,” it would result in a sustainable level of production, Marchionne told reporters.

“Such a dramatic reduction — which would require mass layoffs at a time when Europe is reeling from economic turmoil and has not yet resolved its crippling government debt problems — would be very difficult to achieve,” he said. “It s a tough discussion.”

“I guarantee you re going to have some very negative reactions from industrial European countries to my suggestion.”

Asked what his forecast is for European vehicle demand, Marchionne said he expects it to “stay flat through 2014.”

Fiat’s Italian plants are currently operating at less than 60 percent capacity, a situation Marchionne said is untenable and is mirrored by other European automakers.

The Europeans are broke, prices of all goods are simply too high. This includes the prices for fuel. The Europeans are in a trap. Finance can continually expand without restraint as long as it continually expands without restraint. The fear of large numbers on the part of administrators AND the failure of important finance establishments such as dollar- ‘shadow banking’ in 2008-09 has slowed the expansion of credit, the amount of debt taken on. The slowdown itself is the economic crisis, not the result of it.

Renault, Fiat Pace European Car-Sales Drop as Demand Stalls

Tommaso Ebhardt (Bloomberg)

Renault SA (RNO), Fiat SpA (F) and PSA Peugeot Citroen (UG) led the biggest decline in European car sales since June as consumers balked at making big purchases after the region’s economy shrunk.

Registrations in January fell 6.6 percent to 1 million vehicles, marking the fourth consecutive monthly decline, Brussels-based European Automobile Manufacturers’ Association, or ACEA, said today in a statement.

Sales in France, the region’s second-biggest market after Germany, plunged 21 percent, while deliveries in Italy, the third-largest market, slumped 17 percent. Gross domestic product in the 17-nation of euro area fell 0.3 percent in the fourth quarter, the first drop since the second quarter of 2009.

The Establishment solution is to ramp up the Nazism: starve the European periphery of credit granting it to the car industry and the finance which supports it. What is taking place in the EU is a contest over debt subsidy, Germany rendering Greece and the rest car-free.

What vanishes now is the confidence in systems, which purchase oppression and sell common-sense and any longer-term view. Bankrupting Greece will not cure Europe’s ills. Instead of relief such things lead straight to the bankruptcy of the other Euro-nations including France and Germany. The center of the industrial vortex is the German auto industry, for which the entirety of Europe and the ‘euro enterprise’ trembles at the edge of the pit. The instrument of German finance and industry is the euro. The finance costs associated with the euro are now greater than what the car industry and its finance supporters pretend to earn. If this was not so there would not be a crisis in Europe! The outcome of this will be stupendous: a major currency does not simply vanish without consequences.

But the euro with all of its baggage cannot pay its own way. The clock is ticking … don’t look now … dollar!

What bargains will be Struck, and between which parties? Who gets triaged outhere, who gets what is leftover from the Feast? How do the Leftovers from the All-U-Can-Eat Buffet get distributed out? Who takes home the Stripped Turkey Carcass to boil up into some soup here? How many can live on some boiled Turkey Bones, and for how long?

What bargains will be Struck,
– “Austerity” in Social Security, Medicare/Medicaid and Disability payments
and between which parties?
-Corporations and everyone else.
Who gets triaged outhere?
– “Middle-class” all the way to 1% Caucasians and their peanut-shell complexioned courtiers, duh.
How many can live on some boiled Turkey Bones, and for how long?
-Doesn’t matter to me, as long as I’m part of the “In.”
who gets what is leftover from the Feast
– There is no left-overs, everyone else is being put out behind the house with the refuse.
How do the Leftovers from the All-U-Can-Eat Buffet get distributed out?
– Ever seen a pack of stray dogs battle over a shitty diaper?
Who takes home the Stripped Turkey Carcass to boil up into some soup here?
That’s not refuse. It will be saved for the Haves to be consumed at a later date.

In vs. Out. What can you offer to the Globo-Industrial Plutocracy? Your time and the application of over-specialized techno-skills and your silent complicity in the death of billions. If that’s what you’ve got, you’re in. If you make a peep, call it unfair, deem conditions unjust, provoke morality, civility, decency – well then you can fight over the shitty diapers like the rest of the non-persons.

“The membership of ALEC should scare the pants off of anyone who values a true democratic government and society. It is made up of a combination of politicians and corporations from almost every state. Their “Public” Board of Directors consists entirely of Republican lawmakers:”

No.

It is the public unions and their power to elect those to office who grant them every whim and desire that scares me more. Welcome to Wisconsin.

You own taxable property in Wisconsin? SUCKER.
You are a small business in Wisconsin? SUCKER.

The volume at which business must be conducted in Wisconsin to have a profitable business is such that it is no longer tolerable, or in may cases, possible. Hence business must either be done in the black market, or not done at all. All that will soon be left are large Corporate chains. Wisconsin will be swept clean of small business.

Koch Brothers are not my enemy. My enemy is my neighbor, a public employee, who is taking everything I make – to the point that I am done and finished with Wisconsin. You own taxable property in Wisconsin – SUCKER. It is a liability, with decreasing value, increasing taxes, and no liquidity. It is a scavenger economy – and the public employees and the Politicians they have elected are going to pick the bones clean. Since Wisconsin has no oil – it is the next Greece.

Wisconsin Electric now charges a mandatory monthly fee to help the poor pay their energy bills. Wisconsin is full of energy deadbeats – and now it is mandatory for others to pay their bills – or the lights will go off for everyone.

Social Security, Medicare and Unemployment are all taxes, whose revenue may or may not support entitlements labeled Social Security, Medicare, and Unemployment. It is an inter-generational wealth transfer scheme that America can no longer afford, and is on the way out.

The resources to keep alive those who cannot contribute productively are starting to be strained, and will soon disappear. Nature will take care of the problem. The hospitals and the living dead shall disappear, and we will be better for it.

I was in Milwaukee a couple of years ago and it struck me as being a pretty prosperous place. There are plenty alternative places to compare: New Orleans for one.

NO has pretty much zilch in the way of public services or public employees — and plenty of poor people — and it isn’t a business paradise. It might have something to do with the periodic hurricanes: there is a sense of impermanence in NO that isn’t found elsewhere such as Northern Virginia. Most don’t bother to make investments … it all might be blown away or flooded tomorrow.

Small business is taking it in the neck everywhere and a reason is the bigger businesses and their ability to corral credit. This is how debtonomics works: the bigs get bigger because their aggregate borrowing costs are lower, not because they are ‘better entrepreneurs’ or work longer hours or have curls in the middle of their foreheads. The bigs use leverage to put the smalls out of business.

On the labor front, the bigs — management — put the smalls — labor — out of business. Any job that isn’t nailed down is off to China, this is management leverage at work not the consequence of labor (dis)organization. Outsourcing is an energy hedge: US workers cost more (in energy terms) than do foreign workers even with the energy tax that shipping represents.

In open labor markets the wage tendency is for union and non-union pay schedules to be fairly similar. The reason is that non-union employers are shopping for the same workers who would be hired in unionized companies. The non-union company which does not offer competitive benefits packages will not be able to hire the most reliable, competent workers.

Wages and costs are often the least important aspect of an employment contract. I was an independent businessman for many years, 90% of my customers were unconcerned with the price. Their issue was ‘can I deliver added value?’ That was the nature of my clients whom I selected carefully: my brother who was a similar small business operator: 90% of his customers were only interested in the price.

There are two sides to any labor negotiation, the one side can accept or not any labor offer. The cost of non-acceptance may be too high in that the needed workers cannot be found within a reasonable period of time. It’s hard for a town to fire its police department and be able to hire a replacement. First of all, firing the police would be big news across the area, there would be questions from any new hires: “am I next?” Having the town police-free for an extended period might cost a lot more than paying the current force more money. Everything is a matter of relative costs, it is never, “I pay or I pay nothing”. There are no such thing as zero-cost options in any endeavor.

For example, in my town, there is a large, excellently equipped professional fire department. My town is in Virginia which is a ‘right to work’ state w/o municipal unions. The firefighters are very highly paid with excellent benefits, etc. this is the outcome of decision to have available professional firefighters of the highest caliber. The alternative would have less-than professional officers in a complex fire-fighting environment: high rises apartments, a town center of older flammable buildings, busy highways (with many traffic wrecks), a busy airport, multiple high-value business- and government facilities. Here is a competitive market for firefighters … and police, teachers, transit operators, etc.

Taxes: the taxes esp. property taxes here in NoVa would make yr hair stand up on end. $20k annual taxes on a small house is not out of the ordinary. People also make a lot of money here and can afford the high taxes. There is no escape from taxes although you can move to a lower-tax state such as Florida or Nevada. Taxes don’t seem to matter so much as people move away from these states because of the overall economy. If you can’t get a job even low taxes are too high.

So-called ‘beneficiaries’ in so-called entitlement programs are conduits between finance (lenders) and recipient organizations. For example, Medicare recipients do not receive money from the program, the funds flow from the lender to the ‘healthcare’ rackets by way of these recipients. Pensions, Social Security, etc. are payments sent from lender to banks as funds are spent by the beneficiaries. Funds never leave the economy.

The industrialists are problematic because their enterprises do not pay for themselves, they require endless credit subsidies. This is what ‘debtonomics’ means. Industrial enterprises do not support themselves, they use credit to survive at the expense of everything else.

Industrial enterprises are destructively wasteful: this is why there is a shortage of capital world-wide. Businesses have burned it up for nothing over the course of decades, now there is nothing to show for it but smog and unpayable debts. Industrial enterprises monopolize all claims for debt subsidy, what is taking place in Greece right now is an example. At the same time the industrialists insist their enterprises are ‘productive’ when they are actually reductive.

“Milwaukee Mayor Tom Barrett, an outspoken critic of the governor and the attorney general, said that the city has 4,800 vacant and abandoned properties that would cost about $48 million to tear down. Between 2008 and 2010, almost 16,000 Milwaukee property owners were told that they had defaulted on their mortgage payments. And even though there are signs the economy is improving, the housing crisis is far from over. New foreclosure filings continue to roll in. About 6,000 homes in the city are in foreclosure.

The city has received $37 million in federal assistance, which is being used to buy and renovate the best of the foreclosed homes, to demolish others and to establish a land bank for foreclosed properties. But it wasn’t enough, and the federal well is dry.

Drive the streets in some Milwaukee neighborhoods, and it’s easy to see why Barrett is so concerned. Homes whose windows are boarded over with the city’s telltale green plywood stick out like missing teeth. The mayor and other political leaders held a news conference this week in the 2500 block of N. 38th St. to complain about the decision. The city owns eight of the 32 properties on the block.

“The city is the largest property owner on this block, and the governor and attorney general have turned their backs on the city,” said Barrett, who may run against Walker in a recall election this year.”

So Steve, just like in the Former Soviet Union your handlerers gave you a tour of Milwaukee, and you saw it all. Thanks for sharing your perspective with us – it means a lot to those of us living here. Glad it’s Propsorous for the public employees and the chosen few. Feels great to me. Rah! Rah! More taxes and oppression please.

Hate on the Koch Brothers all you want, but the public employees need to be reined in – and hard.

We have an overpaid and oversompensated Fire Dept. also. Sorry, but life is NOT risk-free, and the costa must be adjusted to what the Community can afford. If trying to afford the best bamkrupts the Community, then the Community winds up with NO protection. NOW is the time hard choices will need to be made – and most refuse to do it.

“Small business is taking it in the neck everywhere and a reason is the bigger businesses and their ability to corral credit. This is how debtonomics works: the bigs get bigger because their aggregate borrowing costs are lower, not because they are ‘better entrepreneurs’ or work longer hours or have curls in the middle of their foreheads. The bigs use leverage to put the smalls out of business. ”

Did you forget that governments are Corporations? School Districts also? What is driving the costs there? They spend EVERY penny they can lay their hand on and then want to borrow more. The Community is so in debt and the taxes are so high that a “gated Community” of the rich is forced upon the people, and thee is nowhere to go. People walk away from their homes and double/triple up. That is what is happening here. You can’t have a small business because the fixed costs from government make it impossible, from day one.

“Industrial enterprises are destructively wasteful: this is why there is a shortage of capital world-wide. Businesses have burned it up for nothing over the course of decades, now there is nothing to show for it but smog and unpayable debts.”

Our government in Wisconsin makes them look like amateurs by comparison.

Democracy in Wisconsin – It’s two Wolves and a Sheep voting on what’s for Dinner.

There are certainly problems in every state in the US: non-productive industrial enterprises have monopoly claims on both physical AND finance resources.

Okay: there are certain areas of debtonomics that have yet to be conclusively reasoned out. One is theory of credit impulse shrinkage leading to deflation (Keen) by way of transmission mechanisms. The other is that credit impulse shrinkage is deflation (Ludlum) no transmission necessary. In any event, the labor component of non-finance enterprises have absolutely nothing to do with availability of credit. From the economic standpoint it does not matter if labor is paid anything, is paid too much or too little as labor costs are recycled as enterprise revenue.

Do you understand what I’m saying?

Credit impulse shrinking can be caused by artificially depriving finance of credit (policy), it can be caused by credit diversion (Ludlum, with some uncertainty) with credit diverted out of the economy toward input/energy suppliers away from enterprises that have constant need for more credit (causing deflation). According to classical economic ‘theory’ this allocation is what economies are supposed to do. I am uncertain because credit toward energy inputs should behave within the economy the same as credit directed toward labor. In other words, energy prices should not make any difference because the returns to the energy supplier must be spent back into the economy.

From a micro-economic standpoint, if every teacher in Milwaukee is paid $10 million per year each teacher will spend that $10 million every year into the local economy allowing it to easily afford the local economy to pay the $10 mil. I’m not making this up: the Milwaukee Brewers have no problem spending $10 million on this or that left-handed pitcher, the Bucks have no problem paying $10 million to this or that ‘power forward’, the Packers paying $10 mil for a left-tackle. The economic flows between team owners, athletes and community are the same as I just described for the $10 mil teacher.

Paying the athlete and not paying the teacher is simple prejudice and misplaced priority. Carl Menger dolled up the prejudice by calling it ‘marginal utility’ but the (false) choice between a losing season or stupid children should never be a choice.

Insert privatization argument here: the university system is effectively privatized, it has become a finance racket and (co-opted) government ‘creditors’: see ‘Enter Mr. Conduit’.

Obviously energy (marginal utility) prices make a big difference. Just watch and see $4 gasoline destroy your community, you can blame it on others but the problem is at the end of your driveway. (The problem also IS the driveway.)

If you follow my thinking so far, where the problems emerge in allocation (of what???) and artificial shortages of credit (clearly taking place in the EU).

The allocation issue is where those who can allocate favor themselves and exclude ‘others’. The premise of debtonomics is that industrialists are able to monopolize credit for their own ends, its not structurally possible for labor (subordinate to both the entrepreneurs’ enterprise and its source of credit) to become the entrepreneur! Labor is EITHER labor OR entrepreneur but never both. Your argument is a non-sequitur because an entity that is creditworthy in the ways that satisfy the egregious demands of BOTH the entrepreneur AND the creditor has no need to ‘hire himself’ as a laborer. He can borrow as much as he can convince the lender his enterprise is ‘worth’ and pocket the loan! He then requires HIS labor (his customers) to repay it.

Now … as for artificial shortages, these are long-term tactic of finance (and a continuing argument on the part of finance for gold standards and hard currency). Credit is extended externally which provides a flood of orders, then credit is withdrawn allowing the retrieval of collateral. All of Europe is vulnerable to this including Germany which believes it is somehow special (as long as it successfully bullies its neighbors so too they will likewise believe). Self-defeating of course, I should not have to explain.

No – I do not understand EVERYTHING you are saying – but I feel i understand enough to help me deal with the overall picture of what is happening:

“From a micro-economic standpoint, if every teacher in Milwaukee is paid $10 million per year each teacher will spend that $10 million every year into the local economy allowing it to easily afford the local economy to pay the $10 mil. I’m not making this up: the Milwaukee Brewers have no problem spending $10 million on this or that left-handed pitcher, the Bucks have no problem paying $10 million to this or that ‘power forward’, the Packers paying $10 mil for a left-tackle. The economic flows between team owners, athletes and community are the same as I just described for the $10 mil teacher.”

You are wrong here in so many ways that I find it hard to address. It tells me all I need to know, that your final analysis and conclusions are flawed because your reasoning is flawed. I will address this issue, and then leave a new comment at the bottom of the thread:

Teachers = public employees, funded by property taxes, add cost to price of house, adds to cost of doing business through property tax (imagine when you own a house and a separate business builsing), pensions fully funded by taxpayer and based on an unrealistic rate of return in a finite World (exponential problem), etc. etc.

Teachers in Wisconsin have not paid their way or created much of value, our Cities are a wasteland, our youth are mostly good for nothing – it’s also problem caused by social liberal.

Bucks and Brewers = private enterprise, paid for by those willing to voluntarily pay to support these teams, adds value to tax base.

So, it’s simply not worth anymore time debating your flaws… I’ll move on to the end of the thread.

I always encourage people who feel they have something important to say to start their own macro-economics blog and cobble together their own macro theory. It’s not so easy to do. Most current theories are about 150 years old. These have defenders. It’s hard to come up with something actually new. Nevertheless, there is something about writing down inchoate ideas every day that forges these into … ??? Maybe a solid contribution will emerge.

Then again, maybe not.

Meanwhile, it’s always humbling when someone takes over the comment section (which is a public space more or less) … anyway, takes over the comment section and tells me that I am “wrong, wrong wrong … ” without explaining specifically how I’m wrong, just that I am. This is fine, my mother used to tell me the same thing every day for almost fifteen years: I was born wrong and I would die wrong, in between I would also be wrong. She said this sometimes banging me on the top of my head with a metal pot or some other hard object. It can be said I have learned to accept criticism at my mother’s knee.

Your’s is a very tough row as you are arguing against double-entry bookkeeping. 🙂

The Brewers and Packers aren’t funded by property taxes, unlike public employees, like Teachers.

Property taxes are an assault on my property rights, it is acceptance of involuntary servitude that was decided by my ancestors – many who, I am sure objected, for very good reasons, just like the Anti – Federalists.

Property tax means I MUST WORK, and I MUST be able to pay my taxes in legal tender, which I MUST obtain subject to legal restrictions, or not, depending on my risk aversion.

With no property taxes, I need to earn 0 to stay on my land, for an indefinite time. However, someone in the past decided this was the way to fund Communities – socialsim in action – instead of through consumption taxes. Note – that with a consumption tax I have the ability to control the amount I pay by regulating my consumption – unlike property tax.

Since I decided to be self-employed, I need to establish a price to charge, which must take into account all my expenses, costs, and how I would like to live.

Government starts small – and then grows, adding services and costs. At first, the expense to my business is 10. So I charge 10 + X, which leaves me with Y. I remit my 10 to the government and keep X. Soon, the government increases their demands to 20, so now I charge 20 + X and still keep Y, and am happy. Now the government charges me 30, so I go 30 + X, but find I am now making Y-5 due to a decrease in business due to potential customers finding the price of 30 + X more than they can afford, or care to spend. Now the government charges me 40, so I go to 40 + X – Z, to stay competitive. Now my income is Y-Z. And this continues on to where my income doesn’t meet my expenses, and the minimum price I must charge becomes too much to get any appreciable business, so I am out of business. I need work, but I can’t even make enough to pay the taxes, so I don’t work – or go elsewhere. Or I double and triple up.

The power to tax is the power to destroy.

Our local public employees have seen the same increase in prices as those in private business, however, thanks to PROPERTY TAX, have passed those costs along to those in the private sector. Therefore those in the private sector have to pay twice, once for themselves, once for the public employees.

Now those in private enterprise find themselves losing money. They have reached the price ceiling where the volume of business can’t sustain them, and if they drop the price, the lowered revenue can’t sustain them. Lose -Lose. This is where many are.

SO – you walk away from your house. You walk away from your business. You go on the dole. You commit suicide. You rob a bank. You populate a prison. You go elsewhere for work.

The Brewers and Packers have nothing to do with this situation because they don’t have control over my so-called personal property.

Here in Wisconsin the public employees vote in the politician who promises to give them more. They can’t be outvoted. You are forced to pay. SO – we have increasing taxes, decreasing land values, abandoned homes, abandoned businesses and declining revenues in the face of increasing taxes.

How long do you think that is sustainable for?

It doesn’t matter that local government can borrow more – because the residents can’t borrow anymore nor can they afford to pay the increase.

So you have a scavenger economy.

I go to my local government meetings – and see the desperation. All they talk of is more increases, and laying more public employees off. My arguments for shared sacrifice fall on deaf ears.

Debt = Wealth is true, until the credit is gone, and you can’t afford the interest payments either.

Me? I am a landless peasant – glad to own no taxable property, and planning on heading to the Bakken in May, for work. The future is being involved in agriculture or energy production, and not much else.

As you are learning the hard way, your ‘rights’ are completely worthless. Property rights are empty words. You would help yourself by setting aside unenforceable rights. They make you a fixed target for the machine people. You can’t easily make a private space for yourself when you are burdened by property. At the current state your ‘things’ alienates your survival assets which are (generally) ‘human assets’. The same people you disparage as enemies are likely your best resources.

The big shots aren’t ever going to do anything for you, they won’t slow down their car when it runs you over. These are your enemy, they are feeding you a steady diet of nothing, a diet of empty words.

A suggestion would be to find a place that has fewer/less taxes but there are other costs. There is no escaping costs which are systemic. The taxing agencies are simply a (small) part of the greater constellation of costs.

As far as it goes, I can’t really help you. In other words, I cannot ‘solve’ your ‘rights’ problem because you don’t have any rights.

The best I can do is describe a complex system-of-systems accurately. I don’t have any axes to grind. If anyone in finance was ‘system neutral’ I would not have a problem with them or any ideology they might come up with. That is not the case, however.

Mike Shedlock makes a very large intellectual effort to fix blame for (many) public finance problems on public employee unions: this is a part of Austrian economics which is (Mises and Hayek) anti-statist. Some of this I agree with and some I think is nonsense. Shedlock has done the work, he’s paid his dues as an analyst, much of his analysis is first class. I can see past the Austrian nonsense because of the other analysis. I don’t have to agree with everything he writes, but he has earned credibility. You haven’t.

I disagree w/ Shedlock because the position of public employees within the economy does not give them the ability to effect the outcomes he claims. The economy that matters is finance, not the production of goods and services. The purpose of economies in general is to manage the costs of (finance) surpluses away from the surpluses’ owners onto third parties. The third parties have no control over their fate: they have no rights.

If you come over here to claim this or that right, you have none. Get over it. You never had any rights. Anything that the bosses have told you about what it is ‘you have’ is a lie. You’ve been defrauded. The same sort of lies include your car. Your car is a $10k annual lien against your income. You would do better burning up the cash in the fireplace. This isn’t some labor union’s fault. You swallowed the car advertising without any question and now you pay. If you owned a car for twenty years you’ve paid over $100k to some rich dudes for an abstraction: ‘mobility’ … whatever that is.

There is no getting ‘back’ either. There was never any back to go to! America has always been owned by somebody, some king or archbishop, anyone other than you. You are just a sucker. You can try to beat the impossible system but you are guaranteed to lose. Hello.

You’ve chosen the wrong ally. There is no outcome with regards to your ally but your own destruction.

You can choose to defend the prerogatives of the financiers and entrepreneurs, this makes you a ‘useful idiot’ because the financiers will not do anything for you but crush you if you happen gain their attention. These rights you claim are words that the financiers pull out of a hat, abstractions are cost-free for them, something that pins you helplessly because you animate the words, give them life in ways they themselves could never hope to do.

This is what survival(ism) is really all about. You would have less frustration examining your so-called ‘rights’ critically with a mind toward reject those that orbit around ‘things’. They are YOUR empty surplus the costs of which will ultimately ruin you.

Otherwise, you beat your head against the wall. Your GOP pets won’t do anything but put (your) funds into the pockets of their finance overlords and defy you to do anything about it.

The costs at the state-municipal level have to do with the costs of sprawl. It’s more payments to the auto industry.

How to survive what is underway:

– Pay off or walk away from your debts. Property obligations are a form of debt. America is full of apartment houses, rent an apartment.

– Learn how to get along with people. They aren’t scum or parasites. The name of the 21st century game is humility.

– Throw away the TV,

– Get rid of the car. Without the car, the money you save will pay for the apartment.

By lowering the cost of government, more private businesses become viable, thus increasing the tax base, and increasing the number of potential customers, and borrowers. It also reduces the cost of housing, and that is a benefit to all, via reduced living expenses.

There is a fine line between property taxes that are constructive to government, and those which are destructive to government. The people were here BEFORE the government, and can exist without government.

To see an example of Anarchy (not chaos) look in the Old Testament, before Israel had Kings. (I’m not selling religion, or religious, this is merely a TRUE example of Anarchy as opposed to Chaos)

What Wisconsin needs to do is maintain the number of public employees, while reducing their wages and benefits, thus lowering property taxes.

The Brewers and Packers have no effect on this – so to achieve a truer analysis and model you need to drop that fallacy.

What the Koch Brothers are doing in Wisconsin, and Scott Walker, will save Wisconsin, under the assumption of BAU. Obviously peak oil creates an even dire situation, and quite frankly, I am very frightened by this sudden and on-going rise in oil prices.

Steve, does this help you with understanding why professional, private sports teams do not equate to public employees?

And for some proof of how bad it is in Wisconsin look no further than the public employees in their choices of retirements. They love to work here, take the money, get their pension, and then retire in a right-to-work State with NO income tax, low levels of services, and that pay their public employees very little, with few benefits, and low pensions. I should know – my Father is a retired Police Officer and is doing quite well, along with many of his friends. They love Florida, Tennessee, and Las Vegas – for their RETIREMENT.

Which brings up the further problem of retirees who flee Wisconsin and no longer pay their fair share and shield their income from Wisconsin State Income Tax. That is a flaw which needs to be correected – if you retire and benefit from the State of Wisconsin retirement system – then you should have to pay State income tax for life – no matter where you live – so choose carefully.

“Workers & Working Families “Welcome” Wisconsin Gov Scott Walker Today. Naples, FL”
Wisconsin … SW Florida residents and Wear Red for Ed has joined with the AFL CIO and many other activists/organizations to rally/protest the visit of Wisconsin’s Gov Scott Walker in Naples, FL today.”

You are joking, right? The costs of running big sports teams are loaded on the taxpayers with bond issues to build stadiums which only people who can afford $1000/ticket actually go to. The only reason sports teams can pay those ridiculous salaries is because the taxpayer subsidizes the teams, in a much larger per capita.than we subsidize our children.

RE – Yes, we got the stadium tax here in Racine, WI. The Brewers stadium was financed for $290M with a .1% sales tax, shared amongst 5 counties, scheduled to end in 2017.

I know it is wrong.

However our local school district wastes 300M a year and turns out failing students. It’s part of the public education racket and a dismal failure.

Your personal attacks reveal you insecurities and weaknesses, not mine. No one has all the answers because this time is different.

Steve: – I already had none of those items. I’ve always lived cheap. I just purchased for cash a very well maintained 2001 Mercury Villager, which shall transport my body and tools to the Bakken Oil Fields, and which I shall live in also – or a tent.

Today – the Koch Brothers are my friend – because they are the enemy of my enemy. I am very pragmatic. I attend all my local government meetings to learn more – and try to offer alternatives and suggestions – but they are definetely a different breed – and I don’t belong here. People like me, men of action, and health will be needed after the fall. Then my thoughts can have a place in the debate.

I never give up hope however. Otherwise I would have already committed suicide.

Anyhow, you agree it is “wrong”, but I don’t see you out there protesting the $million salaries of Pituitary cases, but you DO protest the $60K salaries of Teachers! Yea, they are just getting RICH of the Taxpayer!

Loering everybody’s wages so they all can keep their obs is just nonsense. This just forces more people into foreclosure, further falling property values and collectable taxes whic then forces further pay cuts.

What is it about debt deflation that you do not understand here? You CANNOT make any of these Goobermints solvent this way, all you will do is eviscerate your own local economy.

Many times that grafitti is right. Obviously I struck a chord in you – you feel it deep down.

Racism – yeah, have to add that too. Have you recently undergone government inspired “sensitivity training” – been indoctrinated in political correctness? What are you afraid of – that I might be right? Can’t have that – it’s RACIST – end of conversation.

RACIST!

HOW?

Scribblings? Go read some more government sponsored news and your local paper and the TeeVee.

A dissenting mind is something to be terrified of and must be reported immediately! See something, say something!

It’s not unusual for the lickspittles of plutocracy to portray themselves as embattled and oppressed rebels when in fact they carry water for interests in society rather more powerful than unions and public sector employees.

The grafitti in question strikes a chord in me to the extent that ignorance makes me want to decry it. (An example: “Teachers are scum.” Were it not for teachers, this knuckle-dragging orc wouldn’t have been able to write that informed bit of sentiment, and the people he was hoping to offend wouldn’t have been able to read it.) The same person who is writing these anti-union and pro-Scott Walker scribblings is also fond of writing “White Power” and “KKK” on the same bathroom wall. I can’t help but wonder how common is the collusion between such sentiments.

And BTW, I don’t begrudge you the right to disagree with myself, Steve, or Democratic Party politicians (whom I don’t entirely trust myself), it was just a sigh of frustration that the pervasive of madness of the far right manages to seep into so many nooks and crannies on teh Interwebz. But I do manage to suck it up and deal once I’ve vented said sigh.

The problem is that we’ve made it impossible to go from A to B without a great deal of pain for a great many people. This is one of those dark secrets of our giant ponzi economy. Every reckoning is merely delayed into the future, indefinitely.

We can undergo the reckoning now, but the banks have promised they will take down the savings of working people with them.

Ok so now we are starting to understand the big picture. We are all trapped, and there’s very little we can do but drop out, get a little land and clothing and food and gold and pray.

If anything, those deadbeats you mention are the ones who have it right. The suckers are the workers keeping the system together!

You are correct! Making the adjustments to our public employees would mean that many would lose their MCMansions, multiple gas-guzzling SUV’s, and Living Large Lifestyle. The modus operandi here has been to maintain salaries and benefits while throwing junior members under the wheels of the bus. It doesn’t end well, and creates a self-reinforcing loopback where the more taxes are raise, the less revenue is generated.

There is an option of shared sacrifice – of adjusting the Community down to a sustainable level – but greed, ambition and the lust for living large must be tamed. Can it be done in 21st. C America? Probably not.

You are obviously aware of the deflationary spiral you will get once you start eviscerating public services and firing the employees.cutting salaries. Unlike the Koch Brothers, these folks actually live in the neighborhood and spend their “high” salaries there. So all you do here is force more foreclosures, lower the tax base and force higher taxation on the few folks still employed and living in a taxable house. When you fire these folks, you will ust end up paying higher taxes than you did before, with fewer services. You are cutting your own throat, deservedly so since you persist in blaming all the wrong reasons and people for the economic problems Milwaulkee has. It ain’t the Unions buddy boy. It’s the Banksters and the Industrialists who left Milwaulkee with the tab of debt after sucking it dry. Wake up and smell the coffee.

Scott Walker positively destroyed the finances of Milwaukee County government during his tenure as County Executive. Of course Tom Barrett didn’t make effective use of this fact revealed during the campaign in November 2010 because Democrats have being lousy campaigners practically encoded into their DNA.

No he didn’t. During the exuberance of the 90’s the Milwaukee County Supervisors (D) voted themselves, and others huge bonuses, pensions and multipliers. Cooler heads tried to prevail and noted that the rate of return required to fund it, 8%, was not realistic or sustainable. Now Scott Walker had to deal with the aftermath.

You are blind to the truth I pointed out above.

RE – I don’t want to see anyone fired. I want to see ALL retain their jobs, and their pay be adjusted to what the Community can afford.

I want to employ MORE in fact, by cutting wages and benefits, but maintaining (not increasing) spending – we can hire more employees. It’s called sharing the wealth – spreading it around.

OK – so a compassionate Democrat fires, and throws under the wheels of the bus lots of public employees to fix the budget – and still has the small matter of an $83 Billion dollar pension shortfall to make up.

Governor Scott Walker (R, Evil Incarnate) – Wants public employees to take a pay cut and pay more towards their pensions and health benefits – but everyone keeps their job.

I have a general question about Debtonomics. Has it always been the case that industrial enterprises can’t really pay for themselves and must borrow their profits, or is this a relatively recent development in the history of industrialism?

From the very beginning. Look at Adam Smith’s pin factory in the intro of ‘Wealth of Nation’. Smith describes the factory in detail but doesn’t mention how much it cost (he doesn’t mention a lot of other things, either).

There is Smith’s pin factory, all the other pin factories, the factories where the millions of pins are made use of, the marketing and transport costs of the pins … all of this in the middle of the 18th century. The factory would have to be paid for before the first pins emerged onto the shipping dock: the funds needed would be beyond the reach of an ambitious working man or even a successful artisan. A rich man could afford the cost but in a high-risk environment it is hard to see aristocrats taking these risks without a credit backstop.

The funds would have to be borrowed.

Afterward would come the ruinous competition between pin factories until there was but one or two in the whole of England, these few having access to cheaper credit than the others (who may in some cases had no credit access at all).

A parallel debtonomic concept is that enterprises with credit will devour the markets of ‘virtuous’ enterprises (those who have not taken on any debt) or the enterprises themselves, simply because the availability of credit is a substitute for earnings.

What England possessed (that the Ottoman Empire or Russia did not) was its own currency, its own commercial banks that could discount bills and letters of credit (non-specie money), a central bank, a government treasury and a source of ‘risk free money’ (gold) in the hands of its countrymen, not in those of the others.

What an ambitious English factory man needed the English banks could provide.

The FIRST great technological advance of the early renaissance (15th century) was the three-masted sailing ship which allowed sailors to carry provisions for long time periods and to sail close to the wind. Three-masted sailing ships allowed Europeans to trade with nations in Asia that at the time were far more prosperous than the Europeans. It also allowed the Europeans to pillage these Asian nations along with those of South America and Mexico, to strip away their portable wealth: their gold and silver. Of course, these ‘voyages’ were also supported by credit, they would have to be!

The payback was extraordinarily high. As with the early oil fields, you could say the EROEI of the first voyages to Asia and the New World was over 100.

So yes, to answer your question, there were almost ZERO self-supporting industrial enterprises even from the beginning.

You can pretty much say the same thing about agriculture as its been practiced for the last 6 millenia at least. Homo Sapiens has been extracting more than the planet can replenish since then. Industrialization just accelerated the process and allowed a bigger boom before the bust.

The effects were quite long term even with smaller populations. Iceland was stripped of its forest cover, Iraq & Iran desertified etc. Granted though, with under 1B and no Nukes, it would take a lot longer to screw up the whole planet.

“A parallel debtonomic concept is that enterprises with credit will devour the markets of ‘virtuous’ enterprises (those who have not taken on any debt) or the enterprises themselves, simply because the availability of credit is a substitute for earnings.”

That is a big reason why I cannot compete, amongst others. Of course I have now seen much of my competition go under and lose everything to the Bankers. Lots of people who worked hard, gambled on big loans, big toys, and are now destitute.

I have a very excellent credit rating, having managed to re-pay all my debt – As much as I hate to, I am trying to re-work my thoughts to allow me to take advantage of that as I head out West.

BTW, the economy enabled by the invention of the Tall Ships is as much a War Economy as it is a Debt-onomy. The two are of course basically synonymous. Control over the High Seas and better Naval assets alowed the British to Rape the rest of the world of resources for a good long time there. Post WWII, this evolved to the Big Ass Navy run by the FSofA MIC. Sadly of course, its basically an anachronism now, much like the Maginot Line. Once the vulnerability of these Sitting Ducks to cheap cruise missiles is revealed, the whole Armada will go down to the bottom of Davey Jones Locker inside 5 years.

Congragulations Steve! You were right again – and now Greece has the option before them – produce or die. It’s the new paradigm. Let’s see what the new bailout has brought to the Greek people, a (mostly) large, unproductive, publicly employed and oil poor state. Courtesy of MISH:

“The programme is much, much more ambitious than economic reform,” said Mujtaba Rahman, Europe analyst at the Eurasia Group risk consultancy. “This is state building, as typically understood in traditional low-income contexts.”

What does the above mean? It means that what IS Greece is largely an unproductive mass of people – that the Greek state is currently an overpopulated parasite that consumes much and produces little or nothing of value.

“Among the measures that must be completed in the next seven days are reducing state spending on pharmaceuticals by €1.1bn; completing 75 full-scale audits and 225 value added tax audits of large taxpayers; and liberalising professions such as beauty salons, tour guides and diet centres”

WOW! Looks like being an overpaid worker in Greece is about to cease. No more expensive life sustaining drugs for the Greek people either. You can’t be a non-productive resource anymore.

“European creditor countries are demanding 38 specific changes in Greek tax, spending and wage policies by the end of this month and have laid out extra reforms that amount to micromanaging the country’s government for two years, according to documents obtained by the Financial Times.

The reforms, spelt out in three separate memoranda of a combined 90 pages, are the price that Greece has agreed to pay to obtain a €130bn second bail-out and avoid a sovereign default that the government feared would throw Greek society into turmoil.

They range from the sweeping – overhauling judicial procedures, centralising health insurance, completing an accurate land registry – to the mundane – buying a new computer system for tax collectors, changing the way drugs are prescribed and setting minimum crude oil stocks”

Kind of like the (your) hated Republicans and the Koch Brothers in Wisconsin. What a bunch of NAZIS! (LOL)

Actually it’s a well reasoned adult telling a bunch of unrepentant resource gobbling Greeks that the party is over. For the Greeks, the best thing they can do is realize the party is over – they blew it – and return to (human) labor intensive farming and construction – perhaps they can produce enough exports to pay for some imported oil and “live a little”. Of course, this means the end of life for many of those who are unhealthy or have limited independence. The extra help from the energy in a barrel of crude will no longer be there to prop them up.

OR – the Greeks could rebel, and go back to the Drachma. As you have pointed out repeatedly, who will take Drachma for oil? Who will take Drachma for imported food?

The resource war is being waged right now. Government Officials are throwing lower employees under the wheels of the bus as fast as they can – in the vain hope they can maintain their level of consumption and lifestyle.

Government Officials have raised the level of property taxes so high, to maintain their level of consumption and lifestyle, that they are forcing people from their homes and they are ending up in the street, or doubling and tripling up. Businesses are closing and going bankrupt as record levels, leaving a wasteland of debt and blight behind – America is now a Scavenger economy. As money and energy supplies tighten, economic necessity will throw more and more under the wheels of the bus – and yes, this means the, in liberal speak, “the most vulnerable” – unless YOU are willing to take the cost and responsibility (LOL).

Government officials here keep raising taxes – and revenues decline – that which can’t be paid won’t – taxable property in Wisconsin is a liability and decreases in worth everyday, while the taxes on it increase. The tipping point has been breached.

OH – we have new jobs here – that pay $12/hr with limited benefits. We have 400 coming courtesy of RUUD Lighting. That is the new reality. These are the jobs that will fund the Government, these are the future homeowners, the future property tax payers – and Government has a choice here – adjust DOWN the salaries and benefits of the public employees to meet the NEW economy, or collapse.

Locally, there are now many desperate ads for highly skilled employees in rich suburbs that surround Milwaukee – for $10/$15/hr. If you live in those Communities, you can’t afford to work for that. They hope to fill them from the surrounding area – however rising fuel prices will make that impossible also. So you have an economic mismatch, people remain unemployed, industry closes down, the tax base disappears, government raises taxes, people leave their homes – and we are now in the Scavenger Economy.

What do we do now? Shared Sacrifice – or “Go GREEK”?

All your theories, musings, and demands won’t change it – and attacking me won’t help you either – although it may make you feel good.

“What does the above mean? It means that what IS Greece is largely an unproductive mass of people – that the Greek state is currently an overpopulated parasite that consumes much and produces little or nothing of value.”

Why did the Germans and the French lend these “unproductive parasites” a trillion euros?

Steve, you did suggest the Euro was a criminal enterprise. So the Bankers, or the faceless owners of the Bankers, used the Euro to do what they always do, and steal the land. Now they just have to get rid of those pesky Greeks on their property.

Caveat: As awful as that is – the Greeks did that willingly to themselves. They enjoyed every minute, until it came time to pay back the Bankers. Also, the Greeks have no major source of oil – so what they built was unsustainable and bound to fail one day – the Euro merely hastened it.

Is the oil embargo of Iran to Europe real, or manufactured to create a situation – to cull Europe? I don’t know – but Europe overshot it’s carrying capacity. TPTB will hide safely while (hundreds?) millions die.

If this is the plan: “A message consisting of a set of ten guidelines or principles is engraved on the Georgia Guidestones in eight different languages, one language on each face of the four large upright stones. Moving clockwise around the structure from due north, these languages are: English, Spanish, Swahili, Hindi, Hebrew, Arabic, Chinese, and Russian.
1.Maintain humanity under 500,000,000 in perpetual balance with nature.
2.Guide reproduction wisely — improving fitness and diversity.
3.Unite humanity with a living new language.
4.Rule passion — faith — tradition — and all things with tempered reason.
5.Protect people and nations with fair laws and just courts.
6.Let all nations rule internally resolving external disputes in a world court.
7.Avoid petty laws and useless officials.
8.Balance personal rights with social duties.
9.Prize truth — beauty — love — seeking harmony with the infinite.
10.Be not a cancer on the earth — Leave room for nature — Leave room for nature”

What’s not to like about the Georgia Guidestones? Nothing as long as you are one of the 500M folks on Schindler’s List there. Call this about 7% of the current World Population. You may even fit into that 7% depending on who writes the Criteria. If the criteria includes “Han Chinese racial charcteristics”, you re probably SOL.

In any case, its those other 93% of the World Population out there who are unlikely to ALL commit Seppuku here, although probably the entire Japanese population will do that, slitting open their bellies and spilling their entrails over Fuk-U-Shima Daichi 1 in an effort to cool the reactor down. The remaining ones will all be after YOU. Lock and Load. Hell is Coming to Breakfast.

What a good article to appear on such a day – to remind Baby Boomers that they have forgotten the Circle of Life, have unrealistic expectations, and that “modern life” is all out of skew with past normal life.

There ain’t nothin’ Nazi ’bout this one. I read this a month ago and was completely down with it. If anything is “Nazi”, it’s the medical-industrial complex and the grueling and grusome torture it afflicts on the sick and dying in the name of very briefly extending their lives. I really have to wonder how we as a society got so very wrong-headed about such things. And individual’s number being up is just part of the circle of life, and any attempt to impose stubborn human will on this natural design will much more likely harm than help.

Sorry for this Rail obsession Steve but Lyon is connected both from a Monetary perspective and now from a post peak oil transport perspective.
The Normans have played a beautiful game of deception.

Germany may be in big trouble due to its dependence on mercantile goodies – France not so much.
I have been watching French oil consumption figures over the past 5 to 10 years and they are declining in a slow steady fashion – unlike the Boom ,Bust episodes of the Irish & Greek experience.
Its hard to escape the notion they were farming us…….

Spain seems to depend on much LNG for its Gas which is expensive – although I don’t have the figures.
It has many LNG ports for its size – from wiki-

SpainBarcelona (Enagás)
Bilbao (consortium including Repsol YPF, BP, [ENAGAS] and Ente Vasco de la Energia), see on a map
Huelva (Enagás), see on a map
Sagunto, Valencia (consortium including Iberdrola, Unión Fenosa and Endesa)
Cartagena (Enagás), see on a map
Ferrol (consortium including Unión Fenosa and Endesa)
Gijón (ENAGAS, starting in 2012)]]

Its energy self suff. is low but not very low by Euro standards given its old Nukes remain at .23 (2009e IEA)
It slightly higher then Portugal anyhow at .21(2009e IEA)

France (.51) has great scope for Tram Train developments to its market towns on its ancient rail lines(France keeps its old lines intact) given its rational settlement pattern.
Iberia not so much.
I hear the EIB is also desperately financing a cable through the Pyrenees of +1GW as Spain seems to be very isolated from the French power system unlike the Italians who depend on much surplus French & Swiss electricity.

Over the passage of time the different regions are going to figure out how to deal with this stuff. It’s part of the trend away from the ‘supply side’ solution that always assumes inflexible demand with the centralized (monopoly) suppliers.

The regional cooperations will create more ‘bottom up’ institutions that will replace the current (faltering) euro-based national varieties.

@Steve
I disagree – a few MAJOR problems with Spanish solar – not enough power captain.
It barely registers on the TPES charts & its diurnal , seasonal and capital intensive.
Its probally only good for those hot air conditioning like days.
Nukes are just capital intensive
National European utilties of the 70s created the oil glut of the 80s as well as far more oil production of course.
Said this before but EDF nuclear production peaked in 2004/5 – the year it became a limited liability corporation.
They could not make any money out of very cheap electricity you see – “so they diversified”
European commission inspired deregulation is at the heart of Europes NG dependence and its increased import dependency /Energy shock.
I know France pretty well – its Industry had to deal with poor coal resourses when compared to Germany, they have a far more practical / scientific understanding / culture for energy dynamics.
Nothing beats splitting atoms for electricity generation if no big Hydro is available – its the present Euro monetory system , it can’t handle gluts.

You need a nation state to flood the system with more credit after production.
They tried it with space heaters , now it Trams & Trains but they are hamstrung with the Euro fiscal thingy , so you get EIB paper trying to fill the investment vaccum.
Its a very hard return (if it was easy it would have been done already)
But French urban / suburban planning helps enormously although curiously England has a denser rail network due to its higher population density.
There is longer distances between major towns in France.

In the 1930’s when the public sector was much smaller every family wanted to have a relative with a public job. I guess I don’t mind paying taxes if I am getting a benefit. Today we have one guard for every two prisoners and one teacher for every forty students so I mind a lot more! The pandering politicians make laws that require us to lock up 10% of the male population and people don’t mind paying money for that. Seems that is our current jobs program in the US. A young man who does some odd jobs for me says he is going to go into the marines and then get a job as a prison guard. He is a good kid too and he is probably correct in thinking that this is the best he can do in life. Why is it that people who bash the public sector always go after teachers?

LOL. Really? You should see how the redshirt unionistas here treat fellow teachers who disagree with them. That’s ok in your World – right?

“It’s for the children” – NO, No it’s not, it’s for your pocket.

It’s time to end the public education racket – return the responsibility of children to their parents. How they do it should be left to private enterprise, not the State.

The biggest tyrant in the Community is the school district.

If the public education racket must stay – end property tax and fund it with consumption taxes. Property tax is property theft, and a feudel system.

Teachers say they don’t want the attention – then go to the State Capital and act like hooligans and animals. They get in your face and shake their fist. There is a problem with your behavior – stop crying about it.

The recall petition-gatherers could probably tell you a thing or two about people who act like animals, namely Scott Walker supporters who think they can stop the recall by acting like a bunch of Klansmen. The demonstrators last February were a model of spirited but appropriate civic dissent. Perhaps you think they “acted like animals” because of the Fox News footage of belligerent protestors that featured palm trees in the background. (Palm trees. In Wisconsin. Try again, Faux News.)

Detroit plans to eliminate bus service from 1 a.m. to 4 a.m. citywide, one of several cuts to transit service that Mayor Dave Bing’s office said it will explain on Thursday.

“City officials wouldn’t go into detail today but said in a news release that it will hold public hearings Feb. 24 on proposals to cut early morning service. In addition, a union official said the plans to lay off 78 more bus drivers and as many as 60 bus mechanics next week.”http://www.freep.com/apps/pbcs.dll/article?AID=2012120215055

It’s game over in Detroit, they just won’t admit it. There will be no shared sacrifice in America this time, it will be an all out resource war – and it will pit public employees VS. private persons and neighbor VS. neighbor.

Detroit has been a company town for the auto industry. As the industry dies, so goes Detroit.

Detroit suffered from ‘white flight’ and expansion of suburbs parallels decline in the city. Unlike many US cities such as San Francisco, New Orleans, Boston even NYC, there never were areas of Detroit that people would simply enjoy being in (such as Lyon).

Detroit’s fate is the same as other big, ugly American company towns like Las Vegas. Suburbia will wind up like Detroit. The places that survive will be places people ‘enjoy’, not just places where developers make quick bucks. Which was Detroit in the early 20th century.

Detroit is a cautionary tale: don’t put all yr municipal eggs in one basket. Detroit needed to diversify away from auto manufacture beginning in 1970s. Nobody bothered, now the costs are being imposed.

Will some sort of Detroit survive? Hard to say, what takes place in the suburbs is being played out now. The Detroit suburbs cannot survive high real fuel prices. The ‘belts’ are likely to become decrepit (as is South Florida). Downtown might enjoy some sort of revival (it might orbit around ‘Agriculture 2.0’).

A resource ‘war’? Not necessary. Ending the waste subsidy paid to industry and there is no need.

Good point. I wonder if the universities will become the monestaries of the new era. And I would add ‘places where it is easier to maintain body temperature’ – certainly in the long run anyway. Warmer climates, such as the mid-Atlantic, also have longer growing seasons. The east coast has plenty of good ports as well as navigatable rivers. Virginia at least has coal as well as uranium still to mine. We also have a modest capacity for wind and solar. The railroad could use a little work.

“The places that survive will be places people ‘enjoy’, not just places where developers make quick bucks”

NO. They will be places the ultra rich enjoy and be protected by heavy security. You won’t want to just wander in there.

For Proles like me, as long as my health holds, the places will be agriculture and energy related – the vast wastelands will be populated by diminishing numbers of violent and disgusting people.

Detroit dies because of an out of control government that taxed it to death and looted the City.

How things play out is heavily dependent upon the electrical grid maintaining functionality. Any loss of electrical power, in any area, for a prolonged period leads to the end of water treatment and sewage systems. Life immediately becomes unbearable – I would expect mass suicides shortly after – disease quickly wipes out survivors.

It takes a lot of interactions to get coal to a power plant, and the natural gas infrastructure is very vulnerable. A power plant getting shut down for a lack of coal isn’t just suddenly brought back on line when coal becomes available later.

LOL. In the tinfoil arena, we should be due for a Galactic Superwave, which will change everything and basically be an ELE, if I understood it correctly.
Suppousedly there is an event soon to arrive, and it has been detected by, uh, the aliens, who outran it. http://www.youtube.com/watch?v=oURVtGKW420

“I wonder if the universities will become the monestaries of the new era.”

How will you fund them, and how will you maintain them?

I see your collectivist marxist theology here – it never works when you run out of other peoples money.

Scott Walker was too little, too late. If he was able to tame public employee salaries and benefits while maintaining employment, (a realistic and workable goal IMO) taxes could have been controlled, your hated “waste industries” would still be here and generate a viable tax base. Instead we got a political fight from selfish and greedy public employees who tainted the business climate and evil private Corporations continue to flee, along with their tax base and employees. We are left with even more evil and tyrannical public Corporations that throw you out of your home and any hope of employment. Of course, crime has exploded. What type of drag do you think that will add to the economy? Your Universities will decay and fall down becacuse the money was diverted to the States Prison Industry, instead of the States Education Industry.

Thank you. I was concerned I might have to stop commenting here because I was on the verge of saying something to the guy that would probably make you want to ban *me*. I wouldn’t be entirely surprised if this unfortunate comment-thread is a common result of suffering Scott Walker supporters to spray their venom.

“There are two forms or sectors within debtonomy, the so-called productive sectors; mainly the automobile, aircraft, energy supply/transmission, basic metals and materials, chemical and warfare industries, industrial agriculture; the ‘health’care rackets; pharmaceutical, house-building and highway construction; the mining industries and ‘retail’. These are the instruments of waste and tyranny. Supporting the industrial sector is the finance sector which provides credit without which the industrial sector cannot exist.”

The last line caught my eye. The word credit needs to be replaced with “debt”.

You’re getting so close now, but you could dance around it for the rest of your life…

Case in point. When trustees fail to ledger my equitable asset title against their debt title, breach of trust is my most enjoyable cause of action. Or perhaps abuse of discretion. Or theft of funds. The flick of my wrist on the original application for credit creates the funds. A grantor does things like that. A good grantor overstands that he is a creator. The terms are synonymous. A grantor of overstanding knows how to place good co-beneficiaries around him, and how to order a trustee to make a payment. The IRS absolutely loves to play ball, and even the most sluggish of CFO’s are willing to dance once drug through a bed of hot coals.

Thanks for the encouragement (and forbearance), all of this is a ‘work in progress’. I’ll have to think about your offer (which I appreciate). You have to understand, this ‘writing business’ I have found myself in the middle of uses up a vast amount of time and attention. Gone are the days when I could ransack the attic for whatever musty 20 year-old idea I could grab and make use of. There is a lot more theory right now, there is a lot more research and reading, all of this takes a lot of attention (worth/value, credit/debt, worth/utility, statistics, when can I get to Library of Congress, etc. :). I’m also writing a book and there are other things I need to do (cook beans w/o burning them, etc.)

At the same time I need to get out of my cave/comfort zone. Let me get back to you …

Credit for the fabulous site layout goes to Peter, I just told him what kind of functionality I thought was lacking on most Blogs and the deficiencies of Message Boards, and he married the two media. Its by no means finished yet either, we’ll also have a Photo Album and a few other cool widgets.

I certainly know how writing can consume hours in the day, but I also think you will get a good deal more readership over time on the DD. The DD will also benefit from your knowledge and insights, plus you can recycle old posts there, you don’t have to write all that much new. Take your time in considering, then come to the obvious conclusion you gotta JOIN THE TEAM! LOL.

Good article there by Jim, but since he keeps banning my IP addy I can’t comment on it there.

Anyhow, the thing Jim seems to ignore here is that Goobertmint/Bankster Economy is nothing like the economy of J6P. J6P cannot infinitely increase his available credit, Da Goobermint can and as long as it behooves them to do so, they will. The issue is where the Power of Credit Creation comes from, and this comes as part of the Property Ownership paradigm. Before you can have any money that works for anything, you must have CONTROL over resources you use credit creation to distribute. Assume you have some resource others want/need, and they have some Gold you will take in trade for that. You can do a Barter on this one until the Gold the buyers have runs out. At this point, what do they have to Trade with you that you want/need to buy? At a certain point, the only thing left to trade is Debt Obligation which attaches the value of Labor to the Debt through taxation. So those folks in control of the main resource of Oil left Gold behind some time back and began trading more in the Debt of Sovereign Nations.

NOW you have two problems. One is that the value of Labor is near worthless, virtually arbitraged out of value through Overshoot. The second is that the resource base upon which you base your Money supply is declining. So the Debt is now basically worthless, and there really is not anything effective upon which to base a monetary sytem until the population shrinks by a whole heck of a lot and you could rebase on a Land/Ag paradigm.

Those in power do not want to let go of the monetary system based on Oil and Debt, its what keeps them at the top of the Pyramid here. So they keep issuing more debt which is increasingly valueless and everybody knows this, except of course for dumbass J6P who just knows he needs Toilet Paper to buy Gas.

Is Extend and Pretend OVER here because all these Malls are going Belly Up as Jimbo documents? Hell no. Its not OVER until the Fat Lady Sings. Long as Da Goobermint cooperates, the TBTF Banks can roll over these loans indefinitely. At a certain point though, the social dislocation will be too much, and both Da Goobermints and the TBTF Banks will fail. It reamins very unclear as to how long they can make this last, it could be quite a while in some of the “developed” economies. Empty Malls do not a Civilization End by themselves. In this civilization in this place, it ends when the JIT transport system fails and/or too many people fall off the economic cliff and have nothing left to lose. We are inching closer to this point, but we are not quite there yet, at least not in the FSofA. They are a good deal closer to this in the PIIGS nations of Europe, and closer still if not already there in MENA.

What is happening is all the bad ideas (that were really, really great ideas at the time) are ripening at once. There is little in the way of investment remaining. DoC’s trains is a good idea now. The entire shopping/consumption/revolving credit mashup is DOA.

Problem w/ trains: they are big, centralized industrial enterprises completely dependent upon credit … they cannot pay their own way. The undecided issue for the greater world is whether this matters, whether the current versions of accounting are useful. Otherwise, the good is held hostage by the ugly at least for the time being.

@Steve
Its a desperate attempt I agree – the trains below move on 19th century coal lines amongest mid to late 20th century sprawling oil dependent satellite towns.
(Google earth is a almost perfect resourse to study these strange spatial 4 dimensional {No 4.time} relationships)
Its far from a perfect fit but if the city / hinterland fabric breaks down then things really break down.
Although you could argue that locomative energy(food for horses ,manual workers etc) does not flow from a cities hinterland to its core anymore.
The city has bypassed its old connections for energy oil imports / slave labour inputs from Arabia & China.

Kunstler is a big fan of Trains as a solution, and for moving around bulk commodities I think they have some intermediary value, but as People Movers they postively suck rocks. Anybody who has ever ridden the NYC Subway sytem will tell you that.

Anyhow, trains are a centralized model and the issue here is the center cannot hold without vast inputs of energy. All the places trains might do any good as people movers are the Big Shities, and the Big Shities are basically toast. They have much deeper problems than just transportation issues, like sanitation and lighting. Death traps, all of them.

It might be a waste if the ECB does not provide Europe with enough money tokens.

Much of the SNCF investment in the 80s ,90s was high speed intercity with many of the regional train lines closed or run down – although SNCF runs a very good feeder Bus service system that has replaced much of these lines.
Well it looks like the New tramtrains are replacing the buses again.
The west of Lyon suburbs & satellite towns have a population of 200,000 with only a slow run down service operating on the remaining suburban line until recently , with 2 of the old feeder lines flowing into the hub of Tassin closed to passenger traffic.
All of these services will flow into the secondary western Lyon train station of Gare Saint Paul which then has a trolleybus outside the station – taking one across the Saone / Rhone rivers if one so wishes.http://www.projet-ferroviaire-ouest-lyonnais.fr/projet1.phphttp://www.projet-ferroviaire-ouest-lyonnais.fr

Also talk of extending the airport train tram to eastern market towns on a older railway cutting !
Remarkable what can be acheived in fixed capital investment when “investment” in roads , cars & houses is deferred.